Consumer packaged goods companies – such as PepsiCo or Nabisco – face severe challenges from rising costs of living and distribution. With inflation continuing unabated, disposable income for consumers will not go as far as it once was as products become more expensive to ship. Then, pressure falls on companies to place their bets on the right innovations. This is true in less chaotic times, but the stakes are higher right now.
Steve King says, while establishing it long before the outbreak of the epidemic black swan data, the data science and technology company he co-launched in 2011, fits perfectly into the current environment. Black Swan exploits data from conversations on social media and analyzes the data to map companies’ “growth opportunities,” in an effort to identify trend signals more accurately than traditional market research approaches.
Prior to co-founding Black Swan, King was Artistic Director at Creative Agency Digital Jigsaw. Black Swan’s other co-founder, Hugo Amos, was PepsiCo’s Director of Digital Marketing Strategy.
“One night in a Toronto bar, Amos and I spent a ‘eureka’ moment to connect seemingly disparate data sets to predict consumer behavior,” King told TechCrunch in an email interview. “After we wrote the idea on the back of a beer rug (now hanging in the London headquarters reception area), Hugo and I headed back to the UK to start Black Swan. We felt there had to be a better way for companies and brands to take advantage of the vast amount of data available. To them; the data is largely irrelevant unless you can effectively harness its power.”
Black Swan claims to leverage published research from Stanford, University College London, META and others to try to predict social trends and sales data in the coming months. To conduct market research, the platform searches through billions of tweets, posts, discussion forum threads, reviews, and blog posts over a two-year period and then filters out nearly 400,000 different concepts (eg, ‘themes’, ‘ingredients’, ‘brands’, “product types,” “benefits and needs”) in the data, for example when people discuss healthy food for children to eat after school. From this, Black Swan finds relationships between concepts to extract ideas that – hopefully – help guide the company’s product development.
“Adopting AI gives users the ability to peek into the future — using predictive algorithms to skate to where the disk is heading rather than where it is currently,” King said. “Black Swan is like the world’s largest focus group. It continually analyzes this data to map growth opportunities and identify emerging trend signals earlier, and more accurately, than traditional market research approaches. This capability provides a more scientific and holistic approach to the new product innovation process, enabling It helps brands eliminate the risk of making decisions in uncertain times when consumer behavior changes rapidly.”
It is true that product development is risky. According to one source, 95% of the more than 30,000 new products introduced each year fail. The shame The rate for new grocery products alone is estimated to be between 70% to 80%.
But can artificial intelligence predict success? The answer is not clear. Black Swan claims it can, as do startups like Black Crow AI, which sells servicing of projects that e-commerce customers will buy, and Turing Labs, which uses artificial intelligence to craft CPG products for mass market appeal. Just because the algorithm is accurate today, does not guarantee that it will be accurate tomorrow. As data changes, predictions can Transformation Of course, at worst giving a false sense of security.
Perhaps that is why King was keen to note that the black swan does not replace human judgment. Instead, it’s supposed to help companies see product categories through a consumer’s eyes, he said, taking into account individual tastes and preferences.
Anyway, Black Swan has done well for itself recently, increasing its customer base to 50 companies, including PepsiCo, J&J, Kraft Heinz, SC Johnson, and P&G. (It was PepsiCo Open About the partnership, Black Swan credits platform with its new line of Propel sports drinks blended with immune-boosting ingredients.) Recurring annual revenue is $10 million, Black Swan — which announced today that it has raised $17 million — plans to expand its 170-person workforce to more than 200 by the end of the year. Other areas of near-term focus include increasing the startup’s US market share and supporting product development, according to King.
Oxx led Black Swan’s latest funding round, with participation from AlbionVC. This brings the company’s total to $18.5 million.
“Black Swan was founded on the belief that brands can make better use of what people openly talk about online to help understand their behavior and anticipate and craft moments for them,” King said. “The adoption of technology-driven market research solutions, in particular AI-based research and predictive analytics, has accelerated significantly, and this is reflected in the growth of Black Swan… The benefit of this entire paradigm shift is that Black Swan sees the market from a consumer perspective and finds new trends and emerging earlier – enabling users to focus more on the consumer and stay ahead of their innovation strategies.”